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India’s Nifty Futures Drop Before Inflation, Production Reports

March 12 (Bloomberg) -- Indian stock-index futures fell before the government releases data on consumer-price inflation and industrial production today, and after foreign funds sold the most local shares in eight months.

SGX CNX Nifty Index futures for March delivery dropped 0.4 percent to 6,528 at 10:29 a.m. in Singapore. The underlying CNX Nifty Index lost 0.4 percent to 6,511.90 yesterday, retreating from a record. The S&P BSE Sensex slid 0.5 percent, the first loss in six days. The Bank of New York Mellon India ADR Index of U.S.-traded shares declined 0.9 percent.

Consumer prices probably rose at the slowest pace since January 2012 last month, according to a Bloomberg survey, a sign central bank Governor Raghuram Rajan’s pledge to prioritize the fight against Asia’s fastest retail inflation may be taking effect. Industrial output may have shrunk for a fourth consecutive month, a separate survey forecast. International investors sold a net $611.7 million of Indian shares on March 10, the biggest net outflow since July 7.

“We expect investors to pull some money off the table given the markets are still in the overbought zone,” Surya Narayan Nayak, head of equity research at Sun Capital Advisory Services Pvt., said by phone today.

Consumer inflation probably rose 8.3 percent from a year earlier in February, compared with 8.79 percent in January, according to the median estimate of 43 analysts. Industrial production probably contracted 0.9 percent in January, after a 0.6 percent decrease the previous month, according to the median forecast of 44 analysts.

Maruti Dispute

Shares of Maruti Suzuki India Ltd., the country’s biggest carmaker by volume, may be active as minority investors seek the scrapping of parent Suzuki Motor Corp.’s plan to build a fully-owned factory in the state of Gujarat.

Sixteen investors with mutual funds and insurers including HDFC Asset Management Co. and Franklin Templeton Investment Management Ltd. termed Maruti’s move a “blatantly wrong and value-eroding oppressive transaction” in a letter to the board. Maruti Chairman R.C. Bhargava confirmed the letter and said the company will stand by its decision.

Coal India Ltd. may move. Employees are planning a three-day strike starting tomorrow to protest the non-payment of a bonus. The company may lose three million metric tons in output if the action goes ahead, according to Director R. Mohan Das. Coal India announced in January a record $3 billion interim dividend for the year ending March 31.

Overseas funds have bought a net $634 million of Indian stocks this year, the most in Asia after Indonesia, data compiled by Bloomberg show. They bought $20 billion in 2013.

The Sensex has risen 3.1 percent this year and trades at 14 times projected 12-month earnings, compared with the average multiple of 14.5 over the past five years. The MSCI Emerging Markets Index is valued at 10.1 times.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Matthew Oakley, Phani Varahabhotla

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